Yields on the U.S. 10yr Treasury bonds declined today, dropping to +2.7% on continued investors’ uncertainties of the monetary policy normalization drive of the U.S. Federal Reserve Bank (Fed). This comes as the former Chairperson of the Fed – Janet Yellen indicated that the possibility of the Fed cutting its benchmark interest rate if the U.S. economy was negatively impacted by the expected slowdown in global economic growth in 2019, and with released economic data from both China and the Eurozone all pointing to continued economic slowdown in both regions in Q1 2019.
We expect investors’ uncertainties of global financial markets to remain strong in the near term, as markets await the release of U.S. Q4 2018 GDP figures. We also expect this to further drive demand for safe-haven risk assets of developed economies and increase volatility in risk asset prices for the reminder of Q1 2019.
Liquidity in the banking system was expected to open on a positive note today. In line with its tight monetary stance, the Central Bank of Nigeria (CBN) conducted an Open Market Operation (OMO) auction today.
A bearish trading day in the treasury bills secondary market, with sell-offs seen particularly at the short-to-mid end of the curve, with the 07 March 2019 maturity trading the most to close at 10.46% from 10.15%. Average rate gained ca +5ps day-on-day. Please find below results of the Open Market Operations (OMO) auction held today:
|Amount Offered:||₦ 10.00billion||₦ 20.00billion||₦ 40.00 billion|
|Subscription:||₦ 19.42billion||₦ 6.64billion||₦ 39.96 billion|
|Amount Allotted:||₦ 19.42billion||₦ 6.64billion||₦ 39.96 billion|
|Range of bids:||11.9000% – 11.9000%||13.5000% – 15.0000%||15.0000% – 15.0000%|
Open Buy Back (OBB) and Overnight (O/N) rates rose to 20.67% and 21.83% from 19.50% and 20.92%. Average fixed deposit rates amongst
banks monitored showed:
– tier-1 rated banks at 3.00% for 30 – 60 days tenor on ₦10mln – ₦100mln.
– tier-2 rated banks at 7.50% for 30 – 60 days tenor on ₦10mln – ₦100mln.
A more active market trading in the bonds secondary market today, with demand seen particularly at the mid-to-long end of the curve. The March 2036 maturity traded the most to close at 15.09% with average yields dropping ca -4bps day-on-day.
The Nigerian equities market appreciated for a 4th consecutive trading day, with the Nigerian Stock Exchange All Share Index (NSE ASI) gaining ca +0.16% day-on-day to close at 30,821.80pts, with market’s year-to-date returns at -1.94%. This was due to price appreciation in Guaranty Trust Bank Plc (+1.76%), Nestle Nigeria Plc (+2.82%) and Zenith Bank Plc (+0.22%).
The NSE Oil & Gas and Industrial indices lost ca -13bps and -62bps respectively day-on-day, while the NSE Consumer Goods and Banking index gained ca +57bps and +125bps. First Bank of Nigeria Holding Plc led both the volume and value charts with 88.57m traded at ₦1.27bn.
The Naira remained stable against the dollar at the interbank market window today, at ₦306.70/$1. In the parallel market, it depreciated against the Dollar at ₦361/$1 from ₦360/$1, while remaining stable against the Pound Sterling and Euro at ₦411/€1 and ₦472/₤1. The Naira appreciated further at the Nigerian Autonomous Foreign Exchange (NAFEX) window at ₦361.75/$1 from ₦362.21/$1.
Crude oil prices reversed some of previous losses from yesterday, on the back of a week-on-week drop in U.S. fuel inventory and a lower rise of 1.3 million barrels in crude stock pile vs 2.5 million barrels market expectation. Brent crude oil price rose ca +1.10% at $62.66pb, while WTI crude also gained ca +0.28% at $53.94pb, as at report time. Spot gold dropped ca -0.22% day-on-day at $1,316.20 per ounce
|AIICO Money Market Fund (AMMF)|
|Net Yield (As at current date)||13.20% per annum|
|Added Benefit||Personal accident insurance cover|
|AIICO Capital Guaranteed Income Note (GIN) Rates p.a.|
|Amount (NGN)||30 Days||60 Days||90 Days||180 Days||364 Days|
|10,000,001 – 50,000,000||10.00||10.50||11.00||12.00||13.00|
|50,000,001 – 100,000,000||11.00||11.25||11.50||12.50||14.00|
|100,000,001 – 400,000,000||12.00||12.25||12.50||13.00||14.50|
|Trading Treasury Bills Rates p.a.|
|Maturity Dates||Tenor (Days)||Discount Rate||Effective Yield|
|Select Macro-economic Indices|
|Inflation % (December 2018)||11.44 (-25.57% ytd)|
|PMI (December 2018)||61.10|
|MPR (%)||14 (-5%/+2% around mid-point)|
|Brent Crude Price US$ pbbl||62.66 (+1.10% d/d)|
|External Reserve (US$’billion)||43.17 (+0.11% ytd)|
|GDP % (Q3 2018)||+1.81% (Q2 2018: +1.50% y/y)|
|NSE All Share Index (ASI)||30,821.80 (+0.16% d/d; -1.94% ytd)|
|Market Capitalisation (₦’Trillion)||11.49|